One of the most widely held myths about the Australian labour movement is that decline of union membership was set in motion by economic and industrial relations reform initiated by the Hawke-Keating Labor government in 1983.

This view, widely shared even among union leaders, is profoundly mistaken.

Union decline began not in the 1980s but in the 1940s, when union density peaked in 1948 at 64.9%. In the same year, the union movement recorded the highest level of support ever achieved at a state level, when an incredible 81.1% of all Queensland’s workers held a union ticket.

Once among the strongest in the world, Australia’s union movement is a shadow of its former self. Less than 20% of the workforce belong to unions. In the private sector, union density barely reaches double figures.

What was behind the process of union decline that began in 1948 and gathered pace in the 1950s and 1960s? And how did the factors that drove this decline affect Australian society and politics?

As Labor ponders the many problems that led to its embarrassing NSW election loss last month, it’s timely to reflect on the decline of the party’s ideological and financial base: the union movement.

Solidarity forever?

In the 1950s and 1960s, economic and industrial relations reforms had little to do with the decline in union membership. Domestic jobs were still protected from foreign competition by high tariff walls while few questioned the benefits of the nation’s arbitration system.

Instead, what caused union decline in these decades was the disappearance of the nation’s blue-collar working class and the values that it had long embodied.

From the early 1880s until the late 1940s, blue-collar jobs consistently made up between two-thirds and 70% of the total. Career opportunities for members of this working class were strictly limited. Few could, or did, afford the expense of sending their children past the minimum school leaving age.

Sons typically followed fathers in their jobs, while daughters, after a short stint working in a clothing factory or canteen, almost always pursued careers as full-time mothers. While a few might start their own small business, the only real way for most to escape a life on the shop floor was as either a union official or Labor Party politician.

With few opportunities for individual advancement, workers instead sought betterment through collective action, relying upon their unions to bargain and strike for higher wages and better conditions.

Realising the potential for deep-seated conflict if the needs of the working class majority were not met peacefully, the authors of the Australian constitution (most notably Alfred Deakin and Henry Higgins) provided the nation with the legal basis for a system of compulsory conciliation and arbitration.

This system not only guaranteed a place for unions – it also gave all adult males a “living” wage capable of supporting a family of five.

Structural change

While the Australian economy experienced much change in the first half of the 20th century, this did not fundamentally alter the structure of society.

A worker in 1948 was just as likely to depend upon his muscles to earn a living as did his father or grandfather. The only difference was he was more likely to work in factory than a shearing shed or farm.

This all began to change after 1948. Between the early 1950s and 1970, the percentage of the workforce engaged in blue-collar jobs fell from two-thirds to 50%. Union density dropped at an almost identical rate, declining from 62 percent in 1954 to 49 percent in 1970.

Then, between 1970 and 1974, union decline was briefly halted and even reversed, as unions gained new recruits among white-collar workers and in the booming manufacturing sector.

This recovery, however, was a false dawn. Many of the new white-collar workers, particularly in the private sector, were forced conscripts, who only joined up due the enforcement of compulsory membership clauses.

By 1974, union decline had returned with a vengeance. Half a million manufacturing jobs were lost in the 1974 and 1981 recessions. Private sector membership fell away sharply, partly reflecting the changing composition of the workplace, but also the more hostile attitudes of employers to unions as they were placed under economic pressure.

From 1990, as the effects of industrial relations and economic reform were felt, union membership experienced an absolute decline, falling by a million in the ensuing two decades. By 2008 there were fewer union members than in 1954.

Blue-collar to aspirational

As the economy continued to change, the once dominant blue-collar working class became increasingly less important. Today, it makes up barely 30% of the workforce and an even smaller percentage of the overall population, given the rise in the number of welfare recipients permanently disengaged from the labour market.

Not only is this blue-collar working class much smaller than in the past, it behaves differently. In a world that constantly highlights individual success, blue-collar workers have, as political pundits have observed, become increasingly “aspirational”.

They work as independent contractors, invest in rental properties and the share market. In short, they behave more and more like the now-numerically dominant professional middle-class that today sets the tone in terms of cultural values and economic behaviour.

The disappearance of the blue-collar working class has not only affected cultural values. It has also had a marked effect on the Labor Party. A number of recent books, most notably Rodney Cavalier’s Power Crisis, have highlighted how Labor today is controlled by a professional “political class”, addicted to spin and with few beliefs other than the pursuit of power for its own sake.

The rise of this “political class”, it is argued, is what is behind the party’s falling popular support, demonstrated most forcefully by Labor’s rout last month’s NSW election, where it secured just 25.5 percent of the vote – the lowest received by the party since 1904, when 23 per cent supported the party.

Unfortunately for those hoping for a quick resurrection in Labor’s fortunes, the rise of the new “political class” is not the cause of Labor’s woes. It is merely a symptom of a wider disease that has its roots in the disappearance of the blue-collar voters upon whom the party was founded.